Balance Of Payments Deficit Steady
Balance of Payments and International Investment Position: September 2001 quarter
The September 2001 quarter Balance of Payments current account deficit was $1,706 million. After adjusting for seasonal factors, this deficit was $660 million. This was $62 million larger than the June 2001 quarter seasonally adjusted deficit of $598 million. The September quarter increase in the deficit follows significant falls in the size of the deficit in both the March and June 2001 quarters.
A $214 million fall in the seasonally adjusted goods and services surplus was the main contributor to the larger September quarter deficit. Exports of goods were $270 million less in the September 2001 quarter than in the June 2001 quarter, while imports of goods were up $80 million. The balance on services improved by $135 million to reach a surplus of $127 million, with little apparent impact on tourism receipts and payments from the September 11 events in the USA.
The September 2001 quarter investment income deficit of $1,669 million was $124 million lower than the June 2001 quarter deficit of $1,793 million. The income deficit is now well below the $2.1 billion deficits of the December 2000 and March 2001 quarters, and reflects higher earnings from New Zealand overseas investments and relative stability in the total earnings of foreign investors from their New Zealand investments.
The current account deficit for the year ended September 2001 was $3,900 million. This is 3.4 per cent of Gross Domestic Product (GDP), and compares with the September 2000 year ended deficit of $7,185 million, which was 6.6 per cent of GDP.
The September 2001 quarter net flow of New Zealand investment abroad of $1.7 billion was less than half the net flow in the June quarter of $4.0 billion. The September result featured a $2.7 billion net flow of New Zealand other investment abroad mainly in the form of loans by the banking sector, and a net $1.0 billion withdrawal of New Zealand direct investment from abroad. Net foreign investment into New Zealand was $3.7 billion in the September 2001 quarter, and featured a net withdrawal of portfolio investment and a net inflow of other investment, mainly loans, to New Zealand banks.
At 30 September 2001, New Zealand's net international asset position was negative $87.9 billion, a 1.3 per cent increase on the 30 June 2001 position of negative $86.8 billion. The value of New Zealand's equity investment abroad, and of foreign equity investment in New Zealand, has been reduced by valuation changes, partly attributed to the economic impacts of the 11 September events in the USA.